Doing the Right Thing vs. Working More to Earn More: A Comparison of Two Incentives-Based Social Policies in the United States and in France
Résumé
Incentives-based social policy offers one particular thing : financial rewards for specific behavior. The goal seems plain and simple: reducing poverty by making financially attractive some “choices” that poor people would not have made otherwise. That could be taking their kid to the doctor, accepting a job or working more hours, or for their children having a good grade, getting a library card or graduating from college. That's for the U.S. version of what is called “conditional cash transfer”, or CCT. The New York City Mayor, Michael Bloomberg, launched the very first merican CCT in 2007 as a mean to “incentivize” poorest New Yorkers to “do the right thing”. In France, poor households are also “incentivized” to work rather than to “rely on” welfare. During the last presidential campaign, the conservative candidate Nicolas Sarkozy urged French poor households to “work more to earn more”. He got elected and two years later, in 2009, a welfare reform passed. The revenue for active solidarity, as it is called, offers a monetary reward for poor people getting back to work or working more. Both of these policies relies on the assumption that people rationally choose to live on welfare. They are the continuation of activation policies. Conditional cash transfers are claimed to be an “investment in human capital”. How new are they? Both happened in a crisis context, but also both were prepared in an election context. What kind of quarrels are revived by these programs? Is poverty a matter of bad behaviors or wrong choices, or of economic structure? How does this affect the policy design?